Creation and Modification of the Employment Relationship

AuthorGeoffrey England
This chapter examines the law governing t he formation and modi f‌ica-
tion of the employment contract.1
First, we analyze who has the “legal capacity” to enter into an em-
ployment contract. We shall see th at there are restrictions at common
law and under legislat ion on the employment of ment al incompetents
and children. As well, speci al legislation sets minimum qualif‌ications
for employment in def‌ined trades, professions, a nd occupations (e.g.,
nursing and electrical maintenance); immigration laws restrict em-
ployment by non-Canadians; and apprenticeship legislation restricts
the conditions under which persons can be engaged as apprentices in
designated trades and professions.
Second, we examine legislated restr ictions on how employers con-
duct recruitment. Here, we analyze the operation of the general prin-
ciples of contract formation and modif‌ication in the context of the
employment relationship, namely,
• offerandacceptance,includingtheStatute of Frauds;
• therequirementofcertaint yandthesourcesofcontractualter ms;
• enforcement ofrepre sentations by means of the tort s of negligent
and fraudulent misstatement;
1 For further det ailed elaboration on this topic , see G. England, R. Wood, & I.
Christie, Employ ment Law in Canada, 4th ed ., looseleaf (Markham, ON: Lex is-
Nexis Can ada, 2005–) c. 7.
• theapplication ofthe doctrine ofconsideration tothe creation and
modif‌ication of the contract; and
• factorsth atwillv itiateanemployment contract,suchas misrepre-
sentation; mist ake; duress, unconscionability, and undue inf‌luence;
and supervening illegality.
Third, we outline the prohibitions against discriminatory hiring
contained in human rights and collective bargaining legislation, the
statutory restr ictions on the activ ities of private employment agencies,
and the statutory prohibitions in Manitoba against conducting personal
investigations of job applicants.
Any person recogni zed as having legal capacity according to the regu-
lar laws of t he land i s el igible to enter into an employment contract,
subject to the statutory limitations reviewed below.
At common law, the term “legal capacity” means that a person must
have suff‌icient mental competency to understand the legal signif‌ica nce
of his or her actions. Lack of mental capacity renders the employment
contract voidable at the option of the incapacitated part y.2 In addit ion,
if an individual’s mental incapacity results in being declared incompe-
tent under provincial incompetent persons legi slation, that individual
cannot become or remain a part y to an employment contract on his
or her own beha lf, but must act through a guardian.3 Of course, in
deciding whether or not to hire or f‌ire an employee who is mentally
incompetent, employers must be mindful that such incompetency con-
stitutes a protected “disability” under the human rights legi slation in
all jurisd ictions.4 The latter legislation prohibits the employer from re-
fusing to hire a person by rea son of mental competence unless the em-
ployer can show that the person will be unable to perform the job, and
the employer has tried to accommodate the employee up to the point of
causing the f‌irm a n “undue hardship.”
At common law, an “infant” — def‌ined a s a person below the age
of eighteen — is eligible to enter into an employment contract, but it
will only be legally binding during infancy if the contract as a whole
2 Hardman v. Falk (1955), 15 W.W.R. (N.S.) 337 (B.C.C.A.).
3 Examples.: Alb erta Dependant Ad ults Act, R.S.A. 2000, c. D-11; Ontario Mental
Incompetenc y Act, R.S.O. 1990, c. M.9.
4 See Chapter 7.

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